Stocks rise for 5th straight session
Technology companies climbed Thursday as stocks rose for the fifth trading day in a row. Major U.S. stock indexes have now recovered about half of what they lost during the market’s dramatic plunge this month.
Tech bellwether Cisco Systems jumped, as did Apple. Most other parts of the market climbed as well, with notable gains for industrial firms and household goods makers. Energy companies continued to struggle.
It took stocks just nine days to skid from record highs into a 10% drop, known on Wall Street as a correction. Concerns about rising inflation contributed to the fall, but even though investors have seen more signs of inflation in the last few days, major indexes are on a five-day winning streak.
“The market should never have gone down 10.5%,” said Rick Rieder, BlackRock’s chief investment officer of global fixed income. Rieder noted that inflation remains low and that the newly passed government budget should push up interest rates because it creates so much new debt.
Cisco advanced 4.7% to $44.08 after it reported a bigger profit and better sales than analysts expected, and said it would buy back an additional $25 billion of its stock.
Apple climbed 3.4% to $172.99 after a Morgan Stanley analyst noted the iPhone X was selling better in China, a key market for the company’s products. Microsoft rose 2% to $92.66.
Among industrial firms, Boeing jumped 3.4% to $356.46, and elevator and jet engine maker United Technologies rose 3.2% to $130.
The market’s recent moves might look familiar because investors have been “buying on the dips” for years. The last significant drop in the market before this month came in June 2016, after Britain voted to leave the European Union. The S&P 500 fell more than 5% in just two days, then gained it back almost as quickly.
Trading volumes have returned to more typical levels this week. They spiked in the first two weeks of February as stock indexes took some wild swings.
In economic news, the Labor Department said Thursday that U.S. wholesale prices rose 0.4% in January, the biggest increase since November. The main reason for the increase was a big jump in energy prices, and those have dropped recently. U.S. crude oil peaked at $66 a barrel in January.
Bond prices were little changed. The yield on the 10year Treasury note remained at 2.91%, its highest level in four years.
Rieder, of BlackRock, said bond prices hardly moved during the recent downturn because investors are realizing that the new federal budget agreement, which puts the country on track for $1-trillion annual deficits the next few years, will keep bond prices lower and interest rates higher.
U.S. crude oil rose 74 cents, or 1.2%, to $61.34 a barrel. Brent crude, used to price international oils, fell 3 cents to $64.33 a barrel.
Wholesale gasoline rose 2 cents to $1.74 a gallon. Heating oil rose 1 cent to $1.89 a gallon. Natural gas fell 1 cent to $2.58 per 1,000 cubic feet.
Still, energy companies mostly fell. They’ve done far worse than any other part of the market lately: Of the 32 energy companies in the S&P 500, only six are higher than at the start of the year.
Gold fell $2.70 to $1,355.30 an ounce. Silver fell 8 cents to $16.80 an ounce. Copper rose 1 cent to $3.25 a pound.
The dollar slid to 106.27 yen from 107.09 yen. The euro rose to $1.2506 from $1.2435.